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Second Mortgage

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If you need some cash and are considering accessing some of your home’s equity, instead of refinancing your first mortgage, consider a second mortgage instead; a second mortgage just might be your better deal.

Right now most lenders are offering no cost and low cost second mortgages which can save a homeowner thousands of dollars in a home refinance. Home equity lines of credit (HELOC’s) as a second mortgage also offer flexibility that a first mortgage does as well. HELOC’s are second mortgages that act as revolving credit. You can access your credit line and pay it back time and time again. While HELOC’s are variable rate seconds, most lenders now allow you to fix all, or a portion, of the interest rate should you choose to do so. HELOC’s are an interest only product for the first 10 years and then fully amortized for the next 20.

Home equity loans (HELOAN’s) as second mortgages are also a good option especially for those who may wish a more conservative second home loan. The interest rate is generally lower than a HELOC and it is a 30 year amortized loan that is due in 15 years.

Both HELOC’s and HELOAN’s are generally easier to qualify for than 1st mortgages as well. If you have equity in your home and good credit, you can complete the process quickly and for little or no cost. So, if you are considering a second mortgage as a home refinance, talk to your lender about these two products.